In China, Hollywood blockbusters face off on same days

Ben Fritz, John Horn and David Pierson, Los Angeles Times

China is rolling up the red carpet for Hollywood.

Just six months after Chinese and American leaders reached a new agreement allowing more foreign movies into the world's most populous nation, officials there are trying to torpedo the box office returns of some of Hollywood's biggest summer films.

American studios carefully schedule their pictures' launch dates — often declaring them a year or more in advance — to avoid colliding with similar movies going after similar audiences. But the state-owned China Film Group, which oversees the release of imported movies, has been scheduling U.S. films from the same genres on the same dates, aiming to limit their total grosses and boost the percentage of box office generated by Chinese-made pictures.

China, now the world's second-largest movie market, also insists upon monthlong "blackout periods," during which only locally produced movies can premiere. This summer, the blackouts have lasted longer, according to American movie executives familiar with the China market.

A China Film spokesman previously told The Times that the overlapping dates were a result of a crowded calendar. But in a subsequent interview in local media, officials gave a different explanation.

"We hope those protective measures will be able to create a space for domestic movies to survive and grow," Zhang Hongsen, deputy head of the film bureau controlled by the State Administration of Radio Film and Television, said to the state-owned People's Daily newspaper.

China Film representatives did not respond to requests for further comment.

It appears Hollywood is being punished for doing too well, the result of relaxed limits on foreign movies and Chinese consumers' surging appetite for Hollywood blockbusters. In late February, China agreed to increase from 20 to 34 the number of foreign movies allowed in under a revenue sharing program.

Thanks to the robust performances of movies such as "Titanic 3D" and "The Avengers," imported films accounted for 65% of China's $1.3 billion of box office receipts through the end of June — a possible embarrassment to the Chinese government.

"China can't be seen as being dominated by Hollywood — that's not the message they want," said Dan Mintz, chief executive of Chinese/American media company DMG Entertainment. "And you have to assume this is going to continue."

China's new restrictions are having the desired effects. All of the top five movies in China from January through June were American. But in the week ended Aug. 19, only one was. The double-dating is killing some movies. "The Lorax" has grossed more than $120 million at the foreign box office but only $2.2 million in China — compared with $67 million for "Ice Age."

Local exhibitors and moviegoers are not happy with the situation.

Pan Xiaming, the manager of a multiplex in Shengzhou, a city of about 800,000 in eastern Zhejiang province, said the "Spider-Man" and "Dark Knight" sequels should never have gone head to head.

"I was so anxious in July and August because there were no interesting big blockbusters and now suddenly we have two very good films together with good reputations," said Pan, who runs an eight-screen theater next to a shopping center. "I wonder why China Film Group doesn't just separate them by one week or half a month. Things would be much better."

The face-off between "The Dark Knight" and "Spider-Man" was the No. 2-trending topic Monday on Sina Weibo, China's wildly popular Twitter alternative, drawing nearly 13 million comments by the early evening.

"Spiderman and Batman are exhibited the same day, if I can only choose one, which one should I choose?" wrote one micro-blogger.

"The American studios are getting more movies into China ... but on the other hand there are these new constraints occurring," said Steven Saltzman, a Loeb & Loeb partner with extensive experience in China. "One shouldn't be surprised, however, because this is a market where noncommercial considerations, including political ones, matter greatly."

In Hollywood, China's decision-making process on whether and when to release an imported movie has long been mystifying.

Companies that desire to have their movies distributed in China submit them to SARFT several months before their U.S. launch date in hopes of getting permission to open there and an optimum release date.

"The Dark Knight Rises," "The Amazing Spider-Man," "The Lorax" and "Ice Age" were cleared by government censors and given a coveted quota slot relatively quickly. The studios then waited — half a year in the case of "The Lorax" — until officials from the China Film Group, part of SARFT, informed them they would be opening against competitive Hollywood pictures. China Film refused to provide an explanation to the studios for its decision.

Hollywood executives with China experience were shocked. None could recall two quota films ever opening against each other, let alone similar ones.

There is no official appeals process, and unofficial lobbying efforts by studio representatives in Beijing were unsuccessful. The Motion Picture Assn. of America, Hollywood's trade organization, has been similarly unable to persuade Chinese authorities to change their policies.

The studios' only recourse would appear to be withholding future releases from China, cutting off a growing revenue stream in an increasingly important foreign movie market. Spokespeople for the MPAA and several Hollywood studios declined to comment. People familiar with the thinking of studio executives said they were fearful that speaking publicly on the matter would antagonize Chinese authorities and lead to further punitive measures.

"While there has been change in the way China handles American movies, it has been and will remain incremental for the foreseeable future," said Saltzman. "To expect otherwise is an unsophisticated approach in this market."